Viewpoint: Money Talks

Tito
Ortiz stole the show at Bellator’s first pay-per-view. | Photo:
Dave Mandel/Sherdog.com

Bellator
MMA held its inaugural pay-per-view on Saturday at the Landers
Center in Southaven, Miss., and I think the company had its
breakthrough moment. The problem: I am not sure exactly what it
means, and neither do the suits at parent company Viacom.

As a television property, Bellator makes money for Spike TV because
it has a tight budget for each show. The advertising revenue is
worth the investment because of the demographics Bellator shows
attract. However, there is a ceiling on how much Bellator can make
as a cable TV property. Pay-per-view is where the money is at. In
order for Bellator employees to get those in charge at Viacom to
open up the checkbook to finance bigger shows, they have to
demonstrate an ability to make waves on PPV. The buy rate numbers
are key, but social media buzz also is important. If Bellator can
establish an emotional connection with some MMA fans, then Spike TV
has something it can work with long-term.

For the first time in the company’s history, there was real buzz on
social media for a Bellator event. The cache of PPV obviously meant
something to fans. Twitter was full of snarky MMA writers and
Ultimate Fighting Championship fans cheering for a debacle and
praying for Viacom’s demise in the MMA space. I am just not sure
why.

Bellator
120 created a lot of strange, exhilarating and befuddling
moments. It gave me flashbacks to the days of EliteXC
events five years ago. There is still a segment of the population
that fondly remembers Kevin
Ferguson, aka “Kimbo Slice,” and promoter Gary Shaw’s musically
challenged son. However, if there is one positive thing EliteXC
accomplished in MMA, it is the fact that the company made stars and
marketed fighters as individual personalities. There is a reason
the UFC is still interested in booking Gina Carano.
EliteXC made an impact on CBS and Showtime. It also lost more than
$50 million dollars. Promoting MMA is a fast way to lose money
while having a good time, but as long as Viacom owns Bellator, it
is not going to lose $50 million dollars.

The UFC has oversaturated the marketplace with an overabundance of
events. There have been some great fights recently, including
Robbie
Lawler-Johny
Hendricks and Matt
Brown-Erick Silva.
However, when you promote so many fights, previous epic encounters
more or less become a blur. You always have to catch up with the
next show to watch. For many fans, watching MMA has become a chore,
like homework. What MMA needs right now are more choices and
different approaches, not a one-size-fits-all weekly calendar of
product that looks and feels the same.

This is where Bellator can develop a niche for itself: quirky,
goofy, bizarrely entertaining, mind-blowing and occasionally
illogical. Give the fans a product that can draw a wide range of
emotions, and you have something that can be marketed.

At Bellator 120, Muhammed
“King Mo” Lawal trashed Bellator CEO Bjorn Rebney after getting
screwed on the Mississippi scorecards, and UFC hall of famer
Tito
Ortiz saved his career by submitting Alexander
Shlemenko with an arm-triangle choke. When I recently wrote
about Ortiz being viewed as a punchline by fans and industry
insiders, I was actually defending the guy from what I think has
been unfair criticism about his track record as a fighter. He has
fought some incredibly tough guys and, win or lose, he has been
willing to put himself in humiliating positions. He has not been
afraid to succeed or fail miserably. His match with Shlemenko was a
perfect demonstration of this principle at work. Ortiz was booked
against an opponent that was supposed to exploit his vulnerability
to vicious body shots. Rebney came out before the fight and
admitted he thought Ortiz would back out at the last minute.
Instead, Ortiz not only stole the show but proceeded to steal the
post-fight press conference stage by stating he was put on Earth to
be a tool. You cannot make up this stuff.

Photo: D.
Mandel/Sherdog.com

Chandler learned a hard lesson.

Former lightweight champion Michael
Chandler discovered the hard way that interim title fights can
be notorious traps for No. 1 contenders. Eddie
Alvarez suffered a concussion and could not defend the Bellator
lightweight title in a rubber match with Chandler. Instead,
Chandler faced Will Brooks
for the interim 155-pound strap and lost a tough, gritty battle. In
the process, Brooks became a real star in the Bellator
universe.

You can argue -- and many critics did -- that two of Bellator’s
young stars had their reputations damaged at the PPV and that the
overall pacing of the event was terrible. The event went past the
three-hour time window; and the tournament format, which was long a
marketing staple for Bellator, is on shaky ground. The good news
for Bellator is that it now has stars to promote.

Quinton
“Rampage” Jackson can fight Emanuel
Newton for the light heavyweight title, embrace a rematch with
“King Mo” or face his original PPV opponent -- Ortiz. We are still
likely going to see Alvarez-Chandler 3, but Brooks is now a player
at 155 pounds. Interim bantamweight champion Joe Warren
remains a marketable character. There are marketing options now
available for future Bellator PPV events. That is a critical factor
in convincing Viacom to invest more money into future Bellator
shows. If you are a fight fan, you want and need to see competition
in this sport.

Getting on PPV and making money in that arena is an important
business step for Bellator. After the WWE Network was launched, a
lot of writers cheered on this development as one more step in
killing the concept of pay-per-view. PPV is a dying industry, they
said. PPV is not where the money is going to be, they claimed. PPV
is killing fan interest, they wrote. Those thoughts simply are not
true. PPV is as strong as ever; you just need a compelling product
to market. Floyd Mayweather Jr. moves the needle in boxing, as does
Manny Pacquiao. UFC women’s bantamweight champion Ronda
Rousey is compelling and has potential to raise her ceiling as
a marketing draw. Stars sell. Bellator now has some stars with
which to work for PPV marketing. There is potential for growth or
least a perception that there is potential.

If Bellator can succeed on PPV, it will open new steams of revenue
for the company. That is a far more optimistic position to be in
right now than having Wall Street investors breathing down World
Wrestling Entertainment’s neck because it missed projections on how
many subscribers it would get for its digital online network. PPV
is a known commodity. The WWE’s departure from PPV opens up
opportunities for Bellator to cash in. The WWE may ultimately
succeed with its network but it is a risky gamble, and it may have
to go back to PPV eventually. If you are an investor, you want to
spend money on what you know, not what you do not know.

The question for Viacom is figuring out what exactly it has with
Bellator and how to invest in the company’s future.